An objective look at gold
and gold stocks

Words of caution: public
readers of my commentaries should exercise their own judgment
as to whether to buy or sell anything. Never trade based on other
people's analysis. Knowing which way to place our bets is only
half of the formula to success. Wishing you peace and profits...

Lets first look at gold

As shown previously in our
January special report to subscribers, the daily 200ema has acted
as support to all pullbacks during this gold bull market, and
has done it again. Prices have now surpassed the Dec high confirming
that the pullback is now complete.

The weekly gold chart confirms
the same as the weekly 50ema has also acted as support for all
pullbacks. MACD is now positive confirming the breakout.

Gold stocks as represented by the
$HUI

Our breakout model - is still
far from confirming a breakout for the $HUI.

Graph #1 - shows the breakdown
(circled) in Jan 2007, and in the past, that has led to a sharp
sell off before a major breakout occurs. Perhaps this time will
be different.
Graph #2 - shows that the model is still on a sell signal from
May 2006.
Graph #3 - shows GDX is still within the ten month long consolidation.
Graph #4 - shows XGD.TO is still within the ten month long consolidation
also.

GDX - nevertheless, GDX is
on a buy signal and we will continue to accumulate upon set ups.
More details for subscribers in this weekend's update.

XGD.TO - Canadian version of
GDX is also on a buy signal, and we'll have more details as how
to further accumulate positions in our ETFs, in this weekend's
update to subscribers.

Summary
Gold's price action is very bullish and indicates that a new
impulsive phase is about to begin. Gold stocks ETFs are lagging
but can catch up in a heartbeat. Both GDX and XGD.TO are still
consolidating near the daily 50ema and we need to see a breakout
above their respective December highs to confirm that the ten
month long consolidation is over, and an impulsive phase has
begun. In the meantime, we continue to accumulate positions upon
set ups in anticipation of the breakout, keeping stops tight
and managing risk. We will become 100% invested once the breakout
is confirmed.